Global Ag News for Dec 15th

 TODAY – EIA WEEKLY PETROLEUM REPORT, NOPA

Wheat prices overnight are down 12 1/2 in SRW, down 11 1/4 in HRW, down 4 1/2 in HRS; Corn is down 2 1/2; Soybeans down 2 1/2; Soymeal up $0.26; Soyoil down 0.69.

For the week so far wheat prices are down 10 3/4 in SRW, down 5 in HRW, down 5 1/4 in HRS; Corn is down 2 1/4; Soybeans down 12 1/4; Soymeal up $1.05; Soyoil down 2.13. For the month to date wheat prices are down 12 3/4 in SRW, down 21 3/4 in HRW, up 6 1/2 in HRS; Corn is up 20 1/4; Soybeans up 35 1/2; Soymeal up $35.30; Soyoil down 3.69.

Chinese Ag futures (MAY 22) Soybeans down 56 yuan ; Soymeal up 24; Soyoil down 88; Palm oil down 160; Corn up 14 — Malasyian Palm is down 214. Malaysian palm oil prices overnight were down 214 ringgit (-4.55%) at 4485 to its lowest level since late September on worries about deteriorating demand from top buyers India and China.

There were changes in registrations (-59 Oats, 50 Corn, -22 Soybeans, -11 Soyoil, ). Registration total: 1,900 SRW Wheat contracts; 41 Oats; 50 Corn; 244 Soybeans; 153 Soyoil; 0 Soymeal; 108 HRW Wheat.

Preliminary changes in futures Open Interest as of #N/A Requesting Data… were: SRW Wheat up 2,267 contracts, HRW Wheat down 1,242, Corn up 4,796, Soybeans down 7,744, Soymeal up 3,373, Soyoil up 10,874.

Brazil Grains & Oilseeds Forecast: Rio Grande do Sul and Parana Forecast: Scattered showers Tuesday. Isolated showers Wednesday. Mostly dry Thursday-Saturday. Temperatures near to above normal through Saturday. Mato Grosso, MGDS and southern Goias Forecast: Scattered showers through Saturday. Temperatures near normal through Saturday.

Argentina Grains & Oilseeds Forecast: Cordoba, Santa Fe, Northern Buenos Aires Forecast: Isolated to scattered showers Tuesday. Mostly dry Wednesday-Saturday. Temperatures near to below normal through Thursday, near to above normal Friday-Saturday. La Pampa, Southern Buenos Aires Forecast: Isolated to scattered showers Tuesday. Mostly dry Wednesday-Friday. Isolated showers Saturday. Temperatures near to below normal through Thursday, near to above normal Friday-Saturday.

The player sheet for Dec. 14 had funds: net sellers of 2,500 contracts of  SRW wheat, buyers of 5,500 corn, sellers of 10,500 soybeans, buyers of 10,500 soymeal, and  sellers of 7,000 soyoil.

TENDERS

• VEGOIL SALE: Egypt’s state grains buyer GASC on Tuesday said it had bought 69,000 tonnes of vegetable oils in an international tender for arrival Feb. 5-25. GASC said it bought 39,000 tonnes of sunflower oil and 30,000 tonnes of soyoil.
• WHEAT SALE: Algeria’s state grains agency OAIC purchased around 690,000 to 700,000 tonnes of optional-origin milling wheat in an international tender on Tuesday
• WHEAT TENDER: Iranian state agency the Government Trading Corporation (GTC) has issued an international tender to purchase about 180,000 tonnes of milling wheat
• WHEAT TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries(MAFF) is seeking to buy a total of 228,783 tonnes of food-quality wheat from the United States and Canada in regular tenders that will close on Dec. 16.
• FEED WHEAT TENDER: An importer group in the Philippines is tendering to purchase up to 220,000 tonnes of animal feed wheat

PENDING TENDERS

• WHEAT TENDER: Bangladesh’s state grains buyer received the lowest price offer assessed at $404.11 a tonne CIF liner out in an international tender to purchase and import 50,000 tonnes of wheat which closed on Dec. 8
• FEED WHEAT AND BARLEY TENDER: Japan’s Ministry of Agriculture, Forestry and Fisheries said it will seek 80,000 tonnes of feed wheat and 100,000 tonnes of feed barley to be loaded by Feb. 8 and arrive in Japan by March 10, via a simultaneous buy and sell auction that will be held on Dec. 15.
• BARLEY TENDER: Jordan’s state grains buyer issued an international tender to purchase 120,000 tonnes of animal feed barley
• WHEAT TENDER: Algeria’s state grains agency OAIC has issued an international tender to buy milling wheat to be sourced from optional origins
• RICE TENDER: South Korea’s state-backed Agro-Fisheries & Food Trade Corp issued another international tender to purchase an estimated 22,000 tonnes of rice to be sourced from the United States
• buyer has issued an international tender to buy 120,000 tonnes of milling wheat which can be sourced from optional origins
• WHEAT TENDER: Turkey’s state grain board TMO has issued an international tender to purchase about 320,000 tonnes of milling wheat

ETHANOL: U.S. Weekly Production Survey Before EIA Report

Output and stockpile projections for the week ending Dec. 10 are based on seven analyst estimates compiled by Bloomberg.

• Production seen lower than last week at 1.084m b/d
• Stockpile avg est. 20.579m bbl vs 20.464m a week ago

CROP SURVEY: U.S. November Soybean Crush Seen at 181.8M Bushels

• Soybean crush seen 0.4% higher vs November of last year, and a decline of 1.2% vs a month ago
• Oil stocks at the end of last month seen at 1.861b lbs vs 1.558b a year earlier
• The National Oilseed Processors Association is scheduled to release its monthly report on Dec. 15.

Klobuchar Unveils Bill to Bar EPA From Biofuel Mandate Cuts

EPA would be prohibited from reducing the U.S. biofuel-blending mandate once annual rules are final under bipartisan legislation by Senators Amy Klobuchar and Chuck Grassley.

• The measure would prevent the Biden administration from retroactively reducing 2020 or future finalized Renewable Volume Obligation levels, Klobuchar, a Minnesota Democrat, says in a statement
• NOTE: The bill, which is unlikely to pass in the current Congress, follows EPA proposing a cut to biofuel-blending quotas retroactively for 2020

Higher U.S. Crop Acreage Should Temper Food Inflation: Citi

U.S. farmers will increase combined planted acreage of corn, soybeans, wheat and cotton by 2.7% in 2022 in an expansion that could bring down food inflation, Aakash Doshi, Citigroup Global Markets Inc. head of commodities research for Americas, says Tuesday in a note.

• More planted area and good weather for crops “should be deflationary for food inflation and bearish agriculture prices” for the second half of 2022
  • While confidence is high on acreage expansion for corn and cotton, soybean area could potentially contract
• High fertilizer costs are a “unique risk” that is adding uncertainty

Drought Further Worsens Crop Ratings in Brazil’s Major Soy State

Crop conditions in Parana, one of Brazil’s largest soybean-producing regions, are deteriorating further as drought and high temperatures persist, Marcelo Garrido, an economist at the state’s rural economics department, says in a telephone interview.

• 71% of crops were rated good on Dec. 13, down from 83% a week earlier and 91% in the prior week, department says on its website
  • That compares with 75% in the same period last season
• 23% rated regular as of Monday, up from 15% last week
• 6% of crops rated poor vs 2% in the previous report
• Conditions are worse in Parana’s western regions, where crops are at the most advanced stages and more susceptible to losses from dryness

Argentina Bourse Doubles Down on Drought Risk for Soy, Corn

A strong La Nina phenomenon is developing, which means “farmland in the Argentine Pampas region will suffer a prolonged dry lapse that’ll start in January and extend until the start of March,” Buenos Aires Grain Exchange climatologist Eduardo Sierra said in an emailed report.

• January is typically dry, but this season La Nina will extend that dryness through February: Sierra
  • Crop health depends on February rains
  • Those rains may not fall until mid-March, “causing significant reduction in yields”
• Rainfall much further north, close to the source of Argentina’s key export route, the Parana River, is deepening the shipping channel
  • While draft will get almost back to normal in the southern hemisphere summer, it will shallow out again very quickly in the fall

Brazil farmers plant more soy in savanna but destroy less virgin land -Abiove data

Brazilian farmers continue to plant more soy in Brazil’s Cerrado savanna region but are cutting fewer trees to do so to avoid the costly investment, according to oilseeds crusher group Abiove which released its data on Tuesday.

Large-scale farming in the Cerrado, which includes vast forested areas although it is classified as a savanna, has turned Brazil into an agricultural powerhouse, while attracting criticism for destroying roughly half of the biome’s native vegetation.

The Cerrado currently represents 52% of Brazil’s entire soy area, as plantings rose about 6% to 20 million hectares (49.4 million acres) in the 2020/2021 season from the previous cycle, Abiove data show.

Abiove said on Tuesday an analysis of soy farm expansion cross-referenced with government deforestation data in the Cerrado revealed that growers are using areas already opened for agriculture or cattle raising.

Between 2001 and 2007, 13% of the soy area expansion in the Cerrado was over native vegetation compared with 3% between 2014 and 2021, the Abiove data showed.

Some 990 towns in the Cerrado cultivate soybeans currently, an area representing 9.8% of the biome.

In the Matopiba region specifically, a group of northeastern states considered the world’s “last agricultural frontier,” expansion of soy areas on native land fell from 40% between 2001 and 2007 to 10% between 2014 and 2021, Abiove said.

Malaysia’s Dec. 1-15 Palm Oil Exports 725,600 Tons: AmSpec

Shipments fell 9.1% m/m from 798,399 tons exported during Nov 1-15, according to AmSpec Agri on Wednesday.

Indonesia’s Palm Oil Stockpiles Fall 6.7% M/m in Oct.: Gapki

Stockpiles fell to 3.4m tons in Oct. from 3.65m tons in the previous month, as exports rose, according to the Indonesian Palm Oil Association, known as Gapki, in an emailed statement on Wednesday.

• Total exports +11% m/m in Oct. to 3.2m tons
  • Nov.-Dec. exports seen at ~6m tons and FY 2021 at 34.9m tons
• Palm oil output -3.5% m/m to 4.4m tons
  • Output in Nov.-Dec. is expected to increase, bringing the total this year to 51.95m tons consisting of 47.5m tons of CPO and 4.5m tons of palm kernel oil
• Domestic consumption -1.8% m/m to 1.45m tons
  • Palm oil use for biodiesel -1.1% to 615,000 tons
  • Palm oil use for food -2.4% to 656,000 tons
  • Nov.-Dec. consumption seen at 3m tons
• Prices of CPO CIF Rotterdam may ease in Nov.-Dec. but still above $1,300/ton

Farm Bureau Calls On Biden to Help With Fertilizer Costs

The American Farm Bureau Federation is calling for the Biden Administration to help US agriculture in pushing high fertilizer prices down. “We urge the Biden administration to look for ways to bring fertilizer prices down, which include resolving supply chain disruptions and removing import duties, so farmers can continue growing the food, fuel and fiber America relies on,” says AFBF president Zippy Duvall. The price of phosphorus-based fertilizers in the US ranges between roughly $830 to $920 per ton, up from between $450 and $500 per ton at this time last year, according to agricultural research firm DTN. Anhydrous ammonia, which helps convert nitrogen into a form usable for plants, is assessed at over $1,300 per ton, an all-time high.